RIM Rebuts Bad PlayBook Sales Report - InformationWeek
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5/20/2011
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RIM Rebuts Bad PlayBook Sales Report

BlackBerry PlayBook sales are well short of estimates and many customers are returning the tablet, according to one report.

RIM BlackBerry PlayBook Teardown
(click image for larger view)
Slideshow: RIM BlackBerry PlayBook Teardownr
Early Friday, the Boy Genius Report website, citing a trusted source, reported that sales of RIM's PlayBook tablet were as much as 90% short of expectations. The information comes from a "big box retailer" says BGR.

Worse, the PlayBook is "being returned at a much higher rate than the Xoom, which has a very high return rate itself at 7% according to our source."

BGR's information conflicts with that of recent reports. In a note to clients, RBC analyst Mike Abramsky said he believes sales of RIM's PlayBook tablet are steady so far after its first month in the market. Since its April 19 launch in the U.S., Abramsky said he thinks RIM has moved about 250,000 PlayBooks. Further, he said RIM is on track to sell 500,000 PlayBooks by the end of the quarter.

"Checks at 180 Best Buys show 14% of the 16 GB sold out, 71% of the 32 GB sold out, and 84% of the 64 GB sold out; however, 32 GB/64 GB stockouts appear allocation-related," he wrote. Are many PlayBooks being returned? Not really, he said, calling PlayBook returns "nominal."

I'd hardly call a return rate higher than 7%--which is what BGR reports--as "nominal."

RIM's stock took a bit of a nosedive after the report was published but has since recovered a bit.

In response RIM issued a statement. It said: "the source of the reported comment is anonymous and unknown to RIM, but the comment is certainly inconsistent with the positive feedback we have received from our main retail partners."

Further, it said, "Best Buy has had great success selling BlackBerry smartphones in North America, so our sales expectations for the BlackBerry PlayBook were very high. To date, we have far exceeded those expectations and we're finding that customers are even more interested in purchasing once they've tested the PlayBook in the store."

That doesn't mean everything is peaches and cream for the PlayBook. Late last week, RIM issued a recall for about 1,000 PlayBooks, all shipped to Staples retail stores. In a statement issued late Sunday, RIM explained, "RIM determined that approximately one thousand BlackBerry PlayBook tablets (16 GB) were shipped with an OS build that may result in the devices being unable to properly load software upon initial set-up."

RIM doesn't explain in further detail what it means by "unable to properly load software." That could mean the devices won't boot, aren't initializing correctly, or can't add additional third-party software once the machine is up and running.

RIM indicated that it will offer a better look at PlayBook sales come June 16.

Vendors are fighting it out in the market for integrated network, computer, and storage systems. In the new all-digital issue of Network Computing, we go ringside to help you pick a winner. Download the issue now. (Free with registration.)

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